• by Wendy Davis  @wendyndavis, August 12, 2015

In a defeat for Yahoo, a federal appeals court has paved the way for a group of consumers to proceed with a class-action privacy lawsuit over the company's email scanning practices.

On Tuesday, two judges of the 9th Circuit Court of Appeals rejected Yahoo's request to appeal a decision issued in May by U.S. District Court Judge Lucy Koh in the Northern District of California, who granted the consumers class-action status.

Shortly after Koh issued the ruling, Yahoo asked the 9th Circuit for permission to immediately appeal. The company argued that the consumers aren't entitled to class-action treatment because the key issue in the privacy dispute -- whether people consented to Yahoo's email scans -- will require individualized assessments.

The appellate judges didn't state why they denied Yahoo's request for an immediate appeal.

The battle between litigation dates to 2013, when a group of consumers alleged that Yahoo violates email users' privacy by scanning their messages in order to surround them with ads. They say that Yahoo violated the federal wiretap law and a California privacy law by allegedly intercepting messages without the consent of both the sender and recipient.

Yahoo's terms of service provide that the company analyzes email in order to display ads, but the people who are suing didn't have Yahoo email accounts and say they never explicitly agreed to the company's terms of service.

Yahoo asked Koh to reject the request for class-action treatment on the ground that questions about users' consent need to be decided individually. But Koh said in her decision that the consumers raised the kinds of “common” questions that don't require separate determinations for every affected Web user.

Koh previously came to the opposite conclusion in a lawsuit involving Gmail. In that matter, a group of Web users argued that Google violated privacy laws by scanning messages in order to surround them with ads.

Koh ruled in the Gmail dispute that the consumers could proceed with their allegations, but refused to allow them to do so in a class-action. Instead, she said they could only proceed as individuals. The users settled their dispute with Google soon after that decision.